In the red: USSU to lose more than $200K next year

Place Riel businesses are starting to pay off for the University of Saskatchewan Students’ Union, but many of the organization’s own services keep losing money, according to the recently proposed 2012-13 budget.

The USSU is receiving healthy returns from the Place Riel rental spaces currently occupied by Mac’s, Harvey’s, Campus Cove and others. However, Browsers, XL Design & Print and Copy Central have slipped into deficit.

Overall, the union is projected to lose more than $200,000 in the upcoming academic year. That compares to a loss of $442,845 in 2011-12 and a loss of $278,736 in 2010-11. The last time the USSU did not fall short of breaking even was in 2009-10.

“I think it’s not too ambitious to say that in the next couple years we will [have] true, break-even, surplus budgets,” said Reid Nystuen, USSU vice-president operations and finance, who presented the organization’s proposed spending plan at last week’s student council meeting.

With much of Place Riel closed for renovations from 2009 to 2011, the USSU surrendered a large cut of revenue that pushed the organization’s bottom line into the red.

But with the student centre now operating at full capacity, Place Riel is expected to generate about $947,000 next year, with the union pocketing about a half-million after facility costs.

“We’re seeing that even in the first year of it being completed, it is certainly an investment that is paying off,” he said.

The students’ union also has plans to turn around some of its ailing businesses.

Nystuen says Browsers, which has consistently lost money since 2010 because of a decline in book consignment, will undergo a $415,000 renovation in the summer of 2013.

“The Browsers space will have a totally different look,” said Nystuen, who has been preaching for an overhaul of the coffee shop and bookstore since his time as an Edwards School of Business student councillor.

He says the renovation will include new flooring, lighting, entrance and bathrooms. The counters along the north and south walls will be removed and the bar will be set to the back.

The goal is to create a “versatile” space that could be used as a coffee shop, lounge and music venue to compliment Louis’.

Browsers will continue selling books for students, but the display shelves will be portable.

“There are still enough people doing consignment that we feel we should still be offering that, but the way we are going to set it up is such that it is not physically built in,” Nystuen said.

To accommodate the revamped coffee shop, XL Print & Design — which has also slumped financially in recent years — will relocate to Memorial Union Building room 103 for an estimated $24,000. XL is projected to lose just over $7,100 next year.

Since 2008, the USSU’s Copy Central has seen usage nosedive by approximately 50 per cent, from 500,000 copies per year to just less than 250,000 in 2011.

The ability to share notes online, the option of scanning at the library and the fact that instructors regularly upload lectures to PAWS are among the main reasons for the dropoff, said Nystuen.

At the current rate of 15 cents per copy, Copy Central is projected to lose more than $40,000 next year.

Louis’, meanwhile, is expected to turn a small profit of $1,500. And, Louis’ Beach Volleyball — the closest thing the union has to a cash cow — is set to clear just over $27,000.

Last year at this time, the USSU approved $400,000 to be spent on future upgrades to Louis’, which is now scheduled to happen in May.

Renovations and improvements will include new chairs, tabletops, upholstering and lighting. The flooring and paint will also be redone, along with the removal of the booths in the centre of the restaurant to make way for an expanded dance floor.

Student council will discuss and likely vote on the proposed 2012-13 budget at the March 22 meeting.

Next year’s won’t be posted online until it’s completely approved. Let me know if you have any other questions about the budget.

Budgets are confusing

Question for you:

Last years budget splits Louis general operational costs from the costs incurred from using the MUB as a space. The lines denoted Louis, and Louis MUB Costs. This is the only case for a business I have seen where they seperate a major cost of doing business from the analysis of whether it is profitable.

The article above mentions that Louis is turning a small profit $1,500. Is this the Louis line inclusive of Louis MUB costs? what about the other 2 Louis lines – Shows and Beach Volleyball?

As in the case of last year, it was reported that Louis was expected to turn a profit where the real case was a substancial deficit position. I’m just wondering if that is still the case.

http://stevenheidel.me Steven Heidel

If you combine all of Louis’ lines it comes out to a loss of $87 610. The reason for that is that the MUB is extremely expensive to maintain as it is an old building. Also, the cost to maintain the common areas of the MUB are split between all its tenants, meaning Louis’ pays utilities for space that isn’t even in Louis’, this is just standard accounting practice.

It’s hard for a campus bar to make money, but the USSU can certainly return to a balanced budget, which I’m planning to do. Like my page if you’re interested: https://www.facebook.com/StevenUSSU

Budgets_are_silly

I don’t think it’s a common accounting practice to not account the expenses directly incurred by doing business into those lines. Especially when it is then perceived that these “businesses” are profitable.

Also, wasn’t Louis renovated a decade ago? Is it common that renovations of “older” buildings do not improve facilities to modern standards? Is Place Riel expected to hemorrhage money in 10 years because it’s an “older” building.

I like your attitude about balancing the USSU budget, but I feel you should take it one step further and have a really hard look at how effiently and effectively student money is being spent to achieve the mandates set out by the Union.

http://stevenheidel.me Steven Heidel

You’re right, moving it to separate lines is fairly non-standard. I was talking about how it’s standard to split the cost of shared space proportionally based on square footage amongst all the tenants of the building, meaning Louis’ also pays for space it doesn’t control.

Businesses usually need to be renovated every 7 years or so to keep them up to date. The main thing that haemorrhages money from that building is the leaky windows, which would cost a fortune to replace.

Do you have any ideas on how to “take it one step further” and change how the money is spent to fit the mandates of the USSU?

Budgets_are_wonky

Note my ideas below are just ideas, and are a starting point for discussion.

Just looking at the budget, it seems deceptive. Note that in last years budget there Administrative costs total near a million dollars. How much of this million can be attributed to other areas of the USSU? How much can be attributed to Louis, Browsers, XL, or any of the centres for payroll, management etc? In normal business practices it might be seen as overhead costs of doing business and my bet is that each service the Union provides has a small part of that million dollar cost.

My point is, how can you have an honest discussion of the cost and benefit of a service if you don’t even know the true cost of providing that service. Is Browsers losing $13,198 (last years numbers) or is it 13,198+38,225 (including MUB costs.) Or is it a larger number when accounting for the percentage of the GM’s/ facilities managers time devoted to meetings and planning, accounting time as a result of payroll, etc etc etc.
What about the capital expenses that are put into Browsers? How are they accounted in the lines – directly or through a seperate line for Capital purchases?

I’m using Browsers as an example, but I’m sure the same can be said for any area.

The point is if the USSU “strives to be the recognized leader in enhancing the student experience,” why don’t they have better involvement in things like Learning Communities, the Gwenna Moss Centre, or have greater involvement in local charities/huskies events. The USSU talks about how sustainability is important, and how the University should be providing more recycling option, or improving the bus loop in front of place reil – why aren’t student fees going to that?

I think I might have started to rant and gotten away from a clear message. For that I appologize. The USSU does many great things, I’m hoping you’re the leader to do things better.

http://stevenheidel.me Steven Heidel

I’ve also had those same questions, which is why I decided to get involved. Thanks for this discussion, if elected my door will definitely always be open to toss around ideas like these.